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African states wary of potential repeal of 'conflict minerals' rule

KINSHASA (Reuters) - A possible plan by U.S. President Donald Trump to suspend a rule on "conflict minerals" could help fund armed groups and contribute to a surge in unrest in central Africa, regional states said on Wednesday.

Sources told Reuters last week that Trump planned to issue a directive targeting a Dodd-Frank rule that requires companies to disclose whether their products contain minerals from war-torn parts of Africa, including Democratic Republic of Congo (DRC).

A leaked draft seen by Reuters calls for the rule to be suspended for two years.

Competition for Congo's vast mineral resources has fueled two decades of conflict in its eastern provinces, including a 1998-2003 regional war that killed millions, most from hunger and disease.

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The International Conference on the Great Lakes Region (ICGLR), a regional body comprising 12 member states including Congo, warned that repealing the provision would make it harder to ensure minerals were conflict free.

"This might ultimately lead to a generalized proliferation of terrorist groups, trans-boundary money laundry and illicit financial flows in the region," the ICGLR said in a statement.

The minerals covered by the rule - gold, tin, tantalum and tungsten - are important components in various electronics, aviation products and jewellery.

Several international campaign groups have urged Trump to maintain the provision. Human Rights Watch said last week that suspending the rule would undermine efforts to eliminate conflict minerals from supply chains.

Business groups opposed to the measure say it forces companies to furnish politically charged information and that it costs too much to trace the source of minerals.

However, some analysts believe scrapping the regulation could end up hurting U.S. companies if it fueled instability in Congo's volatile and mineral-rich North and South Kivu regions.

"Having a better regulated, stable and secure mining environment in the Kivus is in everyone's interest, including U.S. firms," said Oliver Stern, an Africa expert at international risk consultancy Kroll.

The ICGLR acknowledged that the initial roll-out of the law had imposed a "de facto embargo" as major firms avoided buying minerals from the region. However, an ICGLR program to trace minerals' origins had led to a revival of exports, it said.

(Reporting by Aaron Ross and Ed Cropley; Editing by Edward McAllister and Susan Thomas)

 
 
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